Trump orders new pharmaceutical tariff and reshapes metal duties

One year after setting off sweeping trade fights around the world, US President Donald Trump has opened a new front: medicines and metals. In two fresh orders, he moved to tighten pressure on foreign-made pharmaceuticals and rework tariffs on industrial materials central to manufacturing.

The twin measures are aimed at pushing drugmakers to expand production in the United States, while also taking aim at companies US officials say have been “artificially manipulating” metals prices.

Under the revised metals policy, finished goods made with significant amounts of steel, aluminum and copper will be hit with a 25% tariff on their total value, rather than being taxed only on the metal content they contain. Officials described the change as an effort to streamline a system businesses have found burdensome.

It remains unclear what the immediate effect on consumer prices will be, though a senior US official told reporters the administration does not expect the measures to affect affordability.

Generic pharmaceutical products are not subject to tariffs

Britain, meanwhile, has reached an agreement that will allow medicines made in the UK to enter the United States tariff-free for three years, according to the US Trade Representative’s office, as part of a wider pact.

Drugmakers that strike “Most Favored Nation” pricing agreements with the Trump administration and also build factories in the United States may also avoid the steep new pharmaceutical tariff.

Generic pharmaceutical products will not face tariffs, according to a White House fact sheet, which added that the policy will be reviewed again in a year.

The announcements coincided with the anniversary of what Mr Trump called “Liberation Day” — the moment last year when he unveiled a patchwork of tariff rates on goods from dozens of economies, rattling markets and disrupting supply chains.

The moves come on the anniversary of what Mr Trump had dubbed ‘Liberation Day’

While the Supreme Court struck down those global tariffs in February, Mr Trump has continued trying to restore duties by relying on other legal authorities.

He presented “Liberation Day” as the start of an American industrial revival, promising jobs, new revenue and a wave of investment, though critics say those results have largely failed to materialize.

Following through on a threat he made last fall, one of the new orders places a 100% tariff on patented pharmaceuticals produced overseas unless countries negotiate trade deals for lower rates or companies pledge to build plants in the United States.

Major companies will have 120 days to commit to “reshoring plans” before the tariff takes effect, while smaller firms will get 180 days, a senior US official told reporters.

“We expect the lion’s share of the world’s patented pharmaceuticals to be building in America,” the official said.

Companies that agree to construct manufacturing plants — with completion required by the end of Mr Trump’s second presidency — would instead face a 20% tariff.

Affordability hit?

The second order rewrites Mr Trump’s existing 50% tariffs on steel, aluminum and copper, requiring importers to pay duties based on the prices faced by American purchasers.

A White House official said the measure is due to take effect at 12:01am Eastern Time on Monday.

The senior administration official said “foreign countries were artificially manipulating” imported metals prices in ways that allowed them to pay reduced tariffs.

The second order Mr Trump signed reshapes his 50% tariffs on steel, aluminum and copper

That same proclamation states that finished goods containing more than 15% steel, aluminum and copper will be subject to a 25% tariff on their full value, rather than being assessed only on the share tied to metal content.

“It’s a simplification and a fairness issue,” the official said.

Pressed on cost-of-living worries, which have intensified ahead of this year’s midterm elections, the official argued the move should not raise household costs.

“These will not have impact on the price of the good on the shelf,” the official insisted.